If you use a debt management plan (DMP) to repay what you owe lenders, make sure the company that set it up is still making the repayments for you.
Several debt management companies have stopped trading because the Financial Conduct Authority (FCA) has tightened regulations for them.
If the debt management company you use goes under, they could stop making your repayments.
They can help you decide what to do next, including:
Making payments directly to your creditors yourself
Setting up a new debt management plan
Before you contact them, find out what you owe, how much you earn and what bills you pay to give them a clear idea of your financial situation.
If you keep making payments, your money may not make it to your creditors and could be lost.
If you pay by direct debit or standing order, find out when the next payment is due and contact your bank to cancel it. You can do this by:
Phoning your bank
Logging in to your online banking
Visiting a branch
If you have made payments to a debt management company that has gone bust you will need to contact the Financial Conduct Authority.
They will be able to give you details of the company's administrators, who will let you know what is going on and if you can get your money back.
Once you have stopped making payments through a debt management company, you still need to keep paying your debts.
Contact the companies you owe money to as soon as possible to let them know your situation and how you intend to repay them. They may then:
Agree not to take action to recover what you owe to them, such as using debt collectors
Give you time to set up a new debt management plan
Let you make lower repayments while you organise a new DMP
Pass on details of where you can get help and advice
If you decide setting up a new DMP is best for you after getting advice, you can start using one to pay off your debts:
Debt charities can offer DMPs that do not charge any fees.
They can deal with your creditors for you and help you set up a DMP that uses 100% of what you pay towards clearing your debts.
If you use a regulated company and things go worng, you can complain through the Financial Ombudsman Service.
You can check if a company is authorised by checking the FCA's register.
Yes, you can cancel a debt management plan whether:
The company that provides it has gone under
The company that provides it is still trading but you do not want to use them any more
You set it up yourself
This Citizens Advice guide explains how to cancel a DMP. You will need to continue to pay your creditors yourself or start a new debt management plan.